CMA-SAFA focuses on sustainability and corporate responsibility

By Cassandra Mascarenhas

Driving forth sustainability and corporate responsibility within the SAARC region, the Institute of Certified Management Accountants of Sri Lanka (CMA) in collaboration with the South Asian Federation of Accountants (SAFA) hosted the SAFA-CMA Management Accounting Summit 2012 last week.

Held at the Taj Samudra over three days, the summit revolved around the theme ‘Sustainability and Corporate Responsibility,’ which was accepted by all to be a topical subject and was further strengthened by the fact that SAFA has named it one of its objectives to promote sustainability and integrated reporting within its member countries.

Following the inauguration held on the first day, the following two days of the summit featured a line-up of international and local speakers to address the gathering on various topics pertaining to the theme. Participants were able to acquire a vast amount of knowledge on sustainability, CSR, best practices of leading business organisations and the finer points of corporate responsibility.

“CMA Sri Lanka is honoured to host SAFA 2012 and this meeting has seen the gathering of a large number of SAFA members here in Sri Lanka. It is also an appropriate time for CMA to play host to such an event with its South Asian counterparts, at a time when we are seeing many changes in the global economy and with Sri Lanka on the path of development,” expressed CMA President Prof. Lakshman R. Watawala in his opening remarks at the inauguration of the conference.

Speaking about the association’s positioning in Sri Lanka, he added that as a Sri Lankan body, CMA not only needs to provide education in English but also needs to see to the needs of the Sinhala and Tamil medium. In line with this, the first CMA technical journal, translated to Tamil by a fellow CMA member was launched at the inauguration.

Watawala went on to say that the theme is a topic that SAFA has given the highest priority to and is something that they are driving forth in their respective countries. He noted that it is a theme applicable to both the global and local arena and is an area in which professional accountants can play a strategic role in order to improve economic, social and environmental standards.

Guest of Honour, SAFA President Mohammed Rafi revealed that the SAFA accounting institutes in the SAARC region currently represents over 230,000 accountants and that the organisation is now in the process of setting up a member body in Bhutan.

The South Asian federation of accountants (SAFA) which was set up in 1984, has the professional accounting bodies of India, Pakistan, Sri Lanka, Bangladesh, Nepal and the Maldives as its members. This year, Bhutan too attended the meeting in Colombo.

He outlined the organisation’s objectives, stating that its members look to serve the public’s interests through the accounting profession and looks to further strengthen the objectives of SAARC.

“The issue of sustainability has never been as critical as it has economic and social dimensions and because the actions we take today will affect the future. The other aspect is the maximisation of value for shareholders by seizing opportunities and mitigating risk while simultaneously taking up responsibilities for sustainable growth – this poses a challenge to business leaders,” he said. He then commended CMA Sri Lanka for developing and strengthening to accounting profession not only in Sri Lanka but in the SAARC region as a whole.

Uditha Liyanage, addressing the gathering, went into the finer points of the conference’s theme. Defining sustainability as being able to meet present needs without compromising the ability of future generations to meet their needs, he noted that it is all about the future value of present actions.

“The term also embraces three key dimensions, namely economic, social and environmental as well as profit, people and the planet which is the triple bottom line,” he said.

He then moved on to the issue of corporate responsibility, defining it as how companies address the impact that their operations have on the three key dimensions and so help achieve their sustainable development goals.

“If one is sustainable in one’s actions, you become a corporate social citizen. Looking at your theme, I must say that it is valid but superfluous – if you are responsible for one aspect, you are also responsible for the other,” Liyanage noted.

Any thriving organisation has to do three things, he stated, namely it has to operate well, it has to do the right thing by following transparency and governance and finally it has to do good as it is an organ of society.  “If an organisation is sharply focused on the economic dimension, is it doing so at the expense of the social and environmental dimensions – is there a conflict? I was once argued that the other two dimensions are a waste of time, distracting from a company increasing its wealth but this argument is no longer valid. The role of the corporate and the state and stature of companies have changed dramatically now,” he said.

Today, he further expressed, brands are more powerful than nations. It is estimated that total brand value is about one-third of global wealth and the worth of the intangible assets of the top 100 brands amounts to $1.4 trillion. Liyanage revealed that Mitsubishi by itself is a larger economic unit than Indonesia which is the fourth most populous country in the world. Similarly, Toyota is bigger than Norway.

“The ethical marketplace that is emerging has brought about a new segment of consumers who follow lifestyles dictated by health and sustainability. $290 billion was spent on environmentally friendly and corporate responsible goods and services in 2008,” Liyanage added.

“Is there an element of sacrifice in organisations being sustainable? Is there a trade-off between doing well and doing good? Today, the new approach says that we must support social and environmental factors as they support corporate responsibility. It does pay to be sustainable,” he concluded.  

In his keynote address, the High Commissioner for Canada in Sri Lanka Bruce Levy expressed his pleasure at seeing how much CMA Sri Lanka has grown since its beginnings, adding that this theme was something very important to Canadians and something that the country has decided to be proactive about.

“Canada’s links to sustainability is something that we have chosen to not be defensive about but in fact to be proactive. A seeming definition of corporate social responsibility or CSR does not really exist and is a concept that continues to evolve in Canada. The CSR strategy is generally defined as the voluntary activities undertaken by a company to operate in an economically, socially and environmentally sustainable manner,” he stated.

That’s easy to say of course but perhaps less easy to practice, Levy acknowledged, adding that the government of Canada encourages and expects Canadian companies working internationally to respect all applicable laws and international standards. They should operate transparently and in consultation of host governments and local communities.  “They should continue to develop and implement corporate social responsibility best practices but at the same time, Canada recognises that there is a limit to what companies can provide to support the social health and environmental concerns of the communities where they operate. Host governments are responsible for legislation and programmes that meet the needs of the citizens. Canada’s approach to CSR is focused on the voluntary engagement of the private sector. The government of Canada believes that voluntary measures can advance CSR objectives in a flexible expeditious and less costly way than through regulation,” he revealed.

 – Pix by Upul Abayasekara